question
"price taker"
answer
takes the price
question
marginal revenue (MR)
answer
the change in TR from selling one more unit
question
shutdown
answer
a short-run decision not to produce anything because of market conditions
question
exit
answer
a long-run decision to leave the market
question
sunk cost
answer
a cost that has already been committed and cannot be recovered
question
long-run equilibrium
answer
the process of entry or exit is complete - remaining firms earn zero economic profit
question
which of the following is not a characteristic of a competitive market?
a. buyers and sellers are price takers
b. each frim sells a virtually identical product
c. free entry is limited
d. each firm chooses an output level that maximizes profits
a. buyers and sellers are price takers
b. each frim sells a virtually identical product
c. free entry is limited
d. each firm chooses an output level that maximizes profits
answer
c.
question
at the profit-maximizing level of output...
a. marginal revenue equals average total cost
b. marginal revenue equals average variable cost
c. marginal revenue equals marginal cost
d. average revenue equals average total cost
a. marginal revenue equals average total cost
b. marginal revenue equals average variable cost
c. marginal revenue equals marginal cost
d. average revenue equals average total cost
answer
c.
question
which of the following expressions is correct for a competitive firm?
a. profit= (quantity of output) x (price - average total cost)
b. marginal revenue = (change in total revenue) / (quantity of output)
c. average cost = total variable cost / quantity of output
d. average revenue = (marginal revenue) x (quantity of output)
a. profit= (quantity of output) x (price - average total cost)
b. marginal revenue = (change in total revenue) / (quantity of output)
c. average cost = total variable cost / quantity of output
d. average revenue = (marginal revenue) x (quantity of output)
answer
c.
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